By Noemie Bisserbe 

PARIS -- French insurers and asset managers have pledged EUR5 billion in investment for homegrown tech firms as part of President Emmanuel Macron's push to nurture France's fledgling startups into a cohort of highly valued heavyweights.

Mr. Macron announced the funding on Tuesday before hosting a dinner for executives from about 40 sovereign funds and venture-capital firms -- including KKR & Co., Accel and Lightspeed Venture Partners -- at the Élysée Palace on Tuesday evening. Investors include AXA SA, BNP Paribas's insurance unit, and Natixis SA according to French officials.

A spokesman for AXA declined to comment. BNP Paribas and Natixis didn't immediately respond to requests for comment.

"We need to create our champions," Mr. Macron said, adding that his goal was to have at least 25 French tech unicorns by 2025, referring to companies with valuations exceeding EUR1 billion.

Mr. Macron, a former investment banker, is trying to attract foreign tech investors to Paris as part of his efforts to make the City of Light a European technology hub rivaling London. He is hoping that the new pledge by some of France's largest insurers and asset managers will attract other foreign investments in domestic startups, according to the French officials.

France has directed billions in tax breaks and subsidies to domestic startups. But many have struggled to grow because they lack the financing Silicon Valley firms receive from venture-capital funds and other investors, which often push them to scale up before going public. Successful French startups, by contrast, typically find a foreign buyer or relocate to the U.S. to list on Nasdaq.

Kard, a Paris-based startup that offers banking services to teenagers, has raised EUR3 million ($3.3 million) and is currently in the midst of its next round of fundraising. But Scott Gordon, its co-founder and chief executive, says he is speaking mainly to U.S. and U.K. venture capitalists rather than French ones because the Americans and British have a bigger appetite for risk.

"When you talk to a U.S. or U.K. VC, they say, 'How can we put in more money to move faster?'" says Mr. Gordon. "A French VC says, 'How are you going to make money, and how soon?'"

Under Mr. Macron's three-year plan, French insurers and asset managers have agreed to invest more money directly into startups or to channel their investments through established venture-capital funds. They can also plow money into a fund set up by France's national investment bank Bpifrance, French officials said.

--Sam Schechner contributed to this article.

Write to Noemie Bisserbe at noemie.bisserbe@wsj.com

 

(END) Dow Jones Newswires

September 17, 2019 15:57 ET (19:57 GMT)

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